Helene Finidori

The Story of Stuff - We can do better!

That's old stuff but... well, at the scale of economic models and management theories longevity, it's still quite a new provocative way of seeing things, and worth repeating here and again. And it doesn't look pretty. It seems that what we have learned as the recipes for success need to be unlearned.

This video is an animated documentary on consumerism and the life cycle of consumer goods. It connects the model of consumption-based growth to a huge number of environmental and social issues, and underlines the absurdity of running a linear process of extraction, production, distribution, consumption and disposal on a finite planet.

It seems that the founders of micro economics, by taking the "economy as a science" route have dehumanized economics, divorcing it from its ethical component and reduced it to a mere triggering and reinforcing the weakest sides of human nature. Imagine our businesses had a conscience, imagine if rather than playing on humanity's weak sides we started looking at how "virtues" create more effective, meaningful and durable value. Look at this animation as a wake up call.

What can each of us in our companies do to stop being the bad guys and continuing this nonsense that is joepardizing the world our children will become adults in? We should know and do better than that!

There are solutions to make things better without putting the whole system down!

Close-up on Identity

The connection between identity and performance is coming into light. And that’s good news.

In a new book, Identity Economics, released in February, Nobel Prize economist George Akerlof and Rachel Kranton describe how identity helps explain why people, facing the same economic circumstances, make different choices. In their view, an organization works well when people personally identify with it. Jim Heskett dedicates his March HBS Working Knowledge column to the topic, wondering to what degree identity affects economic performance and whether US corporations are not going through an “identity crisis”. A recent research survey led by the Identity Circle measures the impact of organizational identity strength and the awareness thereof on employee engagement and performance, and establishes identity as a key performance driver over any other engagement boosting activity. Paradoxically, the study suggests, most employees are hardly aware of their company’s identity strength. This leaves quite a lot of room for improvement.

Identity has long been a central element of branding and its definition, the specialty of branding agencies, in particular B2B. Because of the frequent disconnect of marcom with strategy and HR in decision making or resource allocation, traditional branding approaches, although capturing a whole wealth of collective knowledge and insight on identity and potential, have concentrated their focus on serving the external dimension of the Brand -the formulation and communication of the promise to the outside audience- but overlooked how this insight could be leveraged towards internal dimensions -such as strategy and people engagement. In worst case scenarios, strategy, brand and HR are developed independently along three separate processes that hinge on different premises and therefore generate mixed priorities and messages, widening the gaps between strategy and execution, perception and reality, promise and delivery, effective marketing and positive outcomes.

Identity is the substance of what characterizes an organization, the set of unique capabilities and characteristics that brought it where it is and that enables it to create value and formulate a promise. It contains the seeds of what will take an organization to the next level. Larry Ackerman from Identity Circles provides a good definition here.

It constitutes a good platform from which Strategy, Brand and HR can be developed in concert.

In two other posts I elaborate on why Strategy formulation should start with identity and why the Brand has a role to play in aligning strategy and execution.

Strategy. So, where do we start? Identity don’t you think?

 

Strategy? It’s all about defining how you will create and sustain (more or better) value: value for your customers, value for your shareholders, value for your people, and ultimately value for all your stakeholders and for society, whether at the local, national or global level.

By the textbook, your strategy should derive from your organizational vision, position your organization or product portfolio so it can ensure a sustainable competitive advantage, and result in the attainment of your strategic goals. You have several tools and templates at your disposal:  SWOT, PEST, 5 forces, Value chain…; several strategic models: cost leadership, differentiation, Blue Ocean, resource based… as well as planning methodologies that ensure the whole strategy is spelled out and ready for implementation…

But where should you start? What is going to drive your strategic thinking? How will you formulate your vision so it can serve as an inspiration and guiding idea and set you apart as a unique organization? How are you going to define your strategy’s content? And once you have formulated a strategy, how do you ensure that it contains enough impetus to energize your people to make things happen and to navigate through volatile environments?

Many of the models out there are outside-in… and based on a prescriptive and almost “mechanical” approach –strategy as a science- where environment shapes strategy, strategy shapes structure, and structure determines outcome. The major focus is on collecting and analyzing hard facts and data, with little room for intangibles and people factors –more difficult to quantify and modelize- and little attention to leveraging the organization's knowledge… 

Just as the theory of efficient financial markets is now disputed because it leaves out matters related to human behaviors and cognitive processes, theories which claim that with equivalent resources and strategies and in similar environments companies would perform equally have long lived.

Ultimately, all else being equal, it’s in the intangibles – an organization’s capabilities and the way it combines its capabilities and resources to create value- that lies the difference. As much as the niche or breakthrough opportunities that you seize, or the competitive advantage obtained through your positioning or product portfolio, it’s who you are, what makes you tick and how you do things that set you apart. It’s your ability to do it better, faster, consistently, adaptively, relevantly to both your audience's current and future needs and wants -whether customers, employees or other stakeholders- and your ability to nurture relationships in the long term that count in the end.

So a good place to start, at the intersection of business strategy and branding is probably to define your identity. Your identity is much more than the form under which you appear as an organization to your audiences. It is the substance that characterizes you, who you are, who you are not, what is important to you. It is the set of unique capabilities that enable you to create value, that brought you where you are, that shaped your culture, image and performance; your potential to reach the next level, and the roots from which your strategy can grow.

Vision, purpose or mission, are the produce of your identity. Defining your identity is being able to answer the questions: why are we in business, and what does the world need most that our business is uniquely able to provide? The brand, your culture and image are its expression.

Defining identity is central to any branding process. Doing it in an integrated approach to branding and business strategy creates better conditions for a successful formulation and execution of business strategy, in particular when it comes to providing purpose and mobilizing people in operations around shared values and goals.

For more information on brand business integration, read my post Aligning Business Strategy and Execution around the Brand and go to JDBBN website.

The Survival of Capitalist Democracies

Capitalism and democracy, can the two co-exist? The question I answered on another forum is indeed provocative.

I believe capitalism and democracy can successfully coexist in the long run only if economic actors become mature enough to police themselves in the way they conduct business, in “exchange” for freedom of market and reduced regulation.

In a democracy the people entrust a government to defend their individual freedom & rights and their interests as a society or nation, and to preserve a social order in a long term perspective.
Capitalism is based on the inalienable right to ownership and profit, and on the principle of a free market.
Conflict between capitalism and democracy occur when the exercise of freedom jeopardizes the rights and interests of the people and the interests of society at large.

In the past 30 years, many economists and management theorists have pushed the concept of freedom of enterprise and free market to a point where any intervention of the state or attempt to regulate the economic, social or environmental field is qualified as “socialism”. At the same time the world has seen more and larger frauds, scandals, crisis, and yoyo bubbles than ever, all in the name of free markets – including wars for democracy-, far from bringing the “equilibrium” expected.

Capitalism and free markets are not to blame here, but rather the behavior of economic actors. A free market does not confer the right to do anything at any cost, regardless of the impacts on people, societies or the generations to come. It can’t be a free ride to grab everything you can as fast as you can. In a democracy, freedom comes with duties and responsibilities. What is true at the individual level is also true for corporate economic actors. For democracy and its social contract to survive in a free market, the economic actors, whether individuals or corporations, must assume their social role (i.e role in society, not “socialistic” role) and take their part of duties and responsibilities. The counterpart of a free market and absence of regulation is the adoption of self imposed rules and principles for the conduct of business as an actor of society, and the accountability thereof. This proactive approach is what I believe Corporate Social Responsibility is ultimately about. When economic actors are not able to police themselves, they misuse the freedom they have been granted, and “the people” will legitimately want to impose more rules, or topple the system.

Proactive Corporate Social Responsibility is the safeguard that will prevent capitalist democracy to fall into socialism, anarchy or the reign of plutocracy…

Sweden -that I had the opportunity to observe for a few years- is probably ahead in its approach of capitalist democracy and practice of proactive CSR. The Swedish democracy is monitored and nurtured. It is the object, together with the cohesion of society, of continuous attentions though a long term engagement in democracy policies, because  nothing is ever to take for granted.

To conclude, I would like to share a quote of Jean Jacques Rousseau that I particularly like:

“What man loses by the social contract is his natural liberty and an unlimited right to everything he tries to get and succeeds in getting; what he gains is civil liberty and the proprietorship of all he possesses. If we are to avoid mistake in weighing one against the other, we must clearly distinguish natural liberty, which is bounded only by the strength of the individual, from civil liberty, which is limited by the general will; and possession, which is merely the effect of force or the right of the first occupier, from property, which can be founded only on a positive title.
We might, over and above all this, add, to what man acquires in the civil state, moral liberty, which alone makes him truly master of himself; for the mere impulse of appetite is slavery, while obedience to a law which we prescribe to ourselves is liberty.”
Jean Jacques Rousseau -The Social Contract - Book I, Chapter VIII                                              

The feminization of values...

Whether you call it Yin/Yang –Chinese philosophy- or Animus/Anima –Jung’s archetypes-, the idea of the feminine/masculine nature of things is not new. Because women attach a great importance to social goals in their work: relationships and collaboration, helping others and the environment in which they live, sociologist Geert Hofstede called these goals feminine goals.

When women are empowered, they influence and “feminize” societies and economies in a positive way, and this becomes a virtuous circle. Small entrepreneurship and policy making seem to be the route to empowerment.
As beneficiary of microcredit loans in developing countries, women put particular emphases in developing their communities as a whole.
As part of policy making bodies in Nordic countries (>45% of parliament in Sweden, even more at local community levels), they have contributed to shape a unique collaborative approach.

Interestingly enough –and hopefully for you guys!-, Geert Hofstede points out that what he calls feminine goals and values in the work place are not a female exclusivity, and that differences exist between women and between men across nations. However, differences are narrower between women worldwide than they are between men. –Vikings, if I remember well, turn out to be the most feminine males, and American women, among the most masculine females-.

As the world becomes flatter and corporate social responsibility gains ground the values and goals that drive the corporate world are “feminizing”. Leaders are required to have more social and relationship skills. The increased role of women in management and leadership position will probably follow. It is yet a lengthy process, and will probably not be a landslide, as even countries like Sweden despite their huge percentage of women in policy making have a very low percentage of women in leadership positions. Why they don’t go there although they have the most “gender equal” society, is another story. Linked to the motivation to exert an influence where they feel it will be the most “useful”?